VIETNAM BUSINESS NEWS JANUARY 15

Vietnam exported nearly 7.2 million tonnes of rice worth 3.49 billion USD last year. (Photo: VNA)

Vietnam exported nearly 7.2 million tonnes of rice worth 3.49 billion USD last year, including many shipments navigating demanding markets such as Japan and the European Union (EU).

Minister of Agriculture and Rural Development Le Minh Hoan said the sales signaled that Vietnamese rice has gained better quality, from choosing varieties for cultivation and standardisation to meet requirements of each market.

Aware of the need to build long-term business strategies, major rice exporters such as Trung An Hi-tech Farming JSC and Loc Troi Group have teamed up with farmers and cooperatives in material zones to generate stable and quality rice supply.

Vice Chairman of the Vietnam Food Association Do Ha Nam said thanks to jasmine and high-quality rice, Vietnam won a number of markets and recorded fast growth in demanding markets such as the US and the EU.

Many firms already received orders until April or even the third quarter of this year.

The VFA forecast that domestic rice exporters have a distinct advantage this year thanks to high rice prices and huge demand from China, the Philippines and Africa.

The Philippines, the biggest importer of Vietnamese rice, has decided to maintain import tax of 35% this year.

Meanwhile, the second Vietnamese rice importer  – China – will lift its zero-COVID policy and reopen its borders with Vietnam, Nam said.

Railway sector identifies major pillars in 2023

The Vietnamese railway sector should identify major pillars to grow further in 2023, Deputy Minister of Transport Nguyen Danh Huy said at a recent conference held by Vietnam Railways (VNR).

The pillars of the rail industry include infrastructure, transportation and mechanical technology, he stressed, urging the sector to work harder to improve its service quality.

The Ministry of Transport (MoT) has paid attention to the development of the sector and accompanied businesses, helping them remove obstacles in line with legal regulations, the official continued.
 
Ho Sy Hung, Deputy Chairman of the Commission for the Management of State Capital at Enterprises, said restructuring the corporation should be a regular task that requires result-oriented solutions.

Pointing to limitations in capital, technology and infrastructure facing the sector, he said more mechanisms on infrastructure management and operations should be supplemented.

VNR General Director Dang Sy Manh told the conference that the sector will perfect service price plans, complete management and maintenance plans, raise service quality, and step up connectivity with travel firms.   
      
The corporation reported that its combined turnover reached 7.71 trillion VND (328.78 million USD), surpassing the value recorded in the same period last year by 13.8% and the set target by 15.8%.

The sector aims to run no losses from its major operations and contribute 115 billion VND to the State budget.

Quality key for Vietnamese longans in Japanese market: expert
     
Viet Nam should maintain the high quality of its farm produce, especially longan, to clinch its position in the Japanese market, according to Vietnamese Trade Councillor in Japan Ta Duc Minh.

Last week, the first batch of fresh longans arrived in Japan, becoming the fourth kind of fruit to be sold in the choosy Japanese market after dragon fruit, mango and litchi.

According to Minh, Viet Nam and Japan started negotiations on Japan’s opening of the market for Vietnamese fresh longan six years ago and reached an agreement on November 23, 2022.

On January 3, Hoang Phat Co Ltd shipped 10 tonnes of fresh longan to Japan. After that, the firm will export about 70-100 tonnes of the product each month to the market.

Minh said that the Viet Nam Trade Office in Japan would coordinate with exporters and Vietnamese authorities to organise promotion programmes to popularise this speciality fruit to Japanese consumers and the Vietnamese community in Japan.

He expressed his hope that Vietnamese fresh longan will also affirm its position in Japan like fresh litchi.

The official noted that currently, Vietnamese dragon fruits hold 80 per cent of the market share in Japan, while that of mango is 6.6 per cent and fresh bananas 0.8 per cent. Meanwhile, some kinds of fruit that have just been sold in Japan for 2-3 years, like durian, litchi and frozen longan, have also seen good sales.

Longan is cultivated in some southern localities of Japan. Still, the production is modest, he noted, stressing that the opening of markets for Vietnamese fresh longan is a great chance for Vietnamese farmers, and at the same time, manifests the high quality of the products, enabling it to enter other markets in the world.

However, Minh warned exporters to ensure the high and stable quality of longan exported to the Japanese market to win local consumers’ confidence.

He highlighted the strict technical standards and plant quarantine process for Vietnamese fresh longan in Japan, advising local farmers to follow the quality management procedures in all production stages to ensure the highest quality of their products.

He also recommended that exporters upgrade their preservation equipment and technology to ensure that longan is kept fresh with a preserved taste for a longer time.

Ministry of Industry and Trade sets ceiling prices for solar and wind projects
     
The Ministry of Industry and Trade has recently introduced new ceiling prices for solar and wind energy in Viet Nam.

On October 3, 2022, the ministry released Circular 15, which sets out a framework for the Viet Nam Electricity (EVN) to enter into tariff negotiations with developers of transitional solar and wind energy projects by reference to some specific ceiling prices.

On January 7, 2023, the ministry set the ceiling prices at VND1,184.90 (5.05 cents) per kWh for ground-mounted solar projects, VND1,508.27 (6.43 cents) for floating solar projects, VND1,587.12 (6.77 cents) for onshore wind projects, and VND1,815.95 (7.75 cents) for offshore wind projects.

EVN will now use these ceiling prices to negotiate tariffs with transitional projects, which are not subject to any tariff so far.

At a seminar earlier this week, Deputy Chairman of the Viet Nam Energy Association Nguyen Van Vy remarked that renewable energy in Viet Nam was facing various obstacles.

Under Circular 32 on power purchase agreement, avoidable cost is defined as the highest cost of producing one kWh of electricity by national generating stations, and the cost would be avoided if EVN purchases the electricity from alternative small hydropower plants.

He revealed that the current avoidable cost was set at VND1,100 (4.68 cents) per kWh, so low that it disincentivises investments in new hydropower plants. He thus called for an adjustment to the cost, estimating that a rate of between VND3,500 to VND4,000 per kWh would be more practical.

Regarding biomass power plants, he said that the plants are fueled by bagasse residue of sugar refining during the sugarcane season and other types of biomass during the rest of the year.

Under his estimation, the plants need to make at least 7.03 cents for each kWh generated by the bagasse and 8.47 cents for other types of biomass to break even. Unfortunately, their electricity is purchased at a price as high as the former, leading to the plants staying idle for eight months every year.

He called for a revision to Decision 08, which set the purchasing price of biomass-derived electricity at over 8.47 cents per kWh during the period out of sugarcane season to encourage the use of other types of biomass in electricity generation.

He was also concerned that the policy mechanism to support solar and wind energy had expired and a new mechanism had not been introduced, leading to a situation that newly built solar and wind farms were put on hold due to the absence of an official feed-in tariff (FIT).

He suggested a temporary FIT, in the meantime, to keep the farms operational until an official FIT would come into force under a new mechanism, which would be applied retroactively to the farms.

“An official FIT was absent when Binh Thuan Wind Power Plant No 1 began operation years ago. At that time, I suggested a temporary FIT of 6.00 cents per kWh and the Prime Minister approved my suggestion,” said Vy. 

Weak finance-backed companies possess large land funds
     
There are now many enterprises on UPCOM with small charter capital but a great amount of land funds.

With low business performance and low stock market price, the businesses can become the targets of other big companies.

With a charter capital of only VND145 billion (US$6.18 million), Ha Noi Food Joint Stock Company (HAF) holds many real estate assets located in the capital’s central areas, including 11 commercial centres, supermarkets and convenience stores; as well as eight hotels, restaurants, and food service establishments.

Some prominent land areas include 736sq.m at 51 Le Dai Hanh Street; 164.5sq.m at 46 Luong Ngoc Quyen; 347.6sq.m at 7 Dinh Liet; and 200sq.m at 30 Hang Dao.

HAF also has other real estate facilities owned by two subsidiaries – Bac Qua Trading and Service Joint Stock Company – in which HAF holds 54 per cent of the capital, and Lang Yen Trading Joint Stock Company in which HAF holds 51 per cent of capital.

A project of Bac Qua Joint Stock Company is located on an area of 2,296sq.m at the intersection of Hang Khoai – Nguyen Thien Thuat and the project of Lang Yen Company is located at 21 Tran Khanh Du.

Despite owning many desirable pieces of land in the capital, HAF’s business activities are inefficient. In the 2016-19 period, the profit of the business declined from VND11.4 billion to VND3.1 billion. Since 2020, HAF has suffered continuous losses.

The financial report of the third quarter of 2022 shows that, in the first nine months of the year, the company’s revenue from sales and service provision reached VND81.29 billion, down 27 per cent compared to the same period in 2021; and after-tax loss was VND6.3 billion, a sharp increase compared to the loss of VND3.5 billion in the same period in 2021.

HAF operates in retail, wholesale and management and operation of a network of locations. The COVID-19 pandemic has severely damaged the wholesale business and exploitation of the network of locations for rental. Some clients closed, returned premises, and liquidated contracts ahead of due time. Accordingly, the company’s commercial revenue went down and losses increased in 2022.

Sleep-aid device invented by VN startup launched globally at CES 2023
     
Eearable Neuroscience launched its highly-anticipated FRENZ Brainband at the 2023 Consumer Electronics Show (CES) in Las Vegas on Saturday (Viet Nam time). The event held offline and online, drew a large audience of tech enthusiasts and industry professionals.

FRENZ Brainband was invented by Earable Neuroscience, a Vietnamese deep technology start-up based in the US and Viet Nam, led by Professor Vu Ngoc Tam – Associate Professor at the University of Colorado Boulder. This product won the prestigious CES Innovation Award for the category of wearable technology devices (Wearable) in November, becoming the first Vietnamese company so far that has received an award at CES.

CES is recognised worldwide as the global stage for innovation and the most influential tech event in the world. Most winners at CES are large companies that own core technology research patents, such as Samsung, with 46 awards at CES 2023 in all different categories, LG, Bosch, Canon, Lenovo, HTC and Qualcomm.

FRENZ Brainband is a smart headset that can potentially disrupt sleep tech as the world’s first wearable that can track and stimulate brain activities via bone conduction speakers to facilitate better quality sleep, focus and relaxation. It’s a minimalist and sophisticated design, and the comfort of the material enables users to use it for a long time, up to 10 hours in all situations, while sleeping, studying and working and entertaining.

This tech product holds 15 global core patents worldwide.

Every year, 900 million consumer wearables are sold worldwide. With 60 per cent of the world population suffering from sleep problems expected to grow, sleep-aid products are emerging as a potent and fast-growing industry. In 2021, the global sleep aid market was valued at $64.08 billion, with a compound average growth rate (CAGR) of 7.1 per cent expected by 2030.

“The device has the potential to become the accessory for the new generation to make better sleep, better focus, better relaxation, or simply to understand more about yourself, about your mind,” said Doan Kieu My, marketing director of Earable Neuroscience at the event.

Recently, the Ministry of Planning and Investment has coordinated with major technology corporations worldwide to announce the Vietnam Innovation Initiative (InnovateVN) and assigned the National Innovation Centre (NIC) to coordinate and connect resources to support and promote Viet Nam’s pioneering innovative enterprises.

NIC Director Vu Quoc Huy said the centre is committed to continuing to coordinate and connect necessary resources such as finance, technology, laboratories, production areas, talented human resources and workspaces to support pioneering innovative businesses such as Earable Neuroscience to develop new products and business models, affirming Vietnamese wisdom on the world innovation map. 

CIP seeks to develop 10-GW offshore wind power project in Vietnam

Copenhagen Infrastructure Partners (CIP) Corporation, a Danish-based investment firm, plans to develop over 10 GW of offshore wind power in Vietnam’s northern and southern regions.

Stuart Livesey, senior director and head of CIP Vietnam, stated the firm would utilize the experience gained from other countries to apply to wind power projects in Vietnam and prop up the country’s economy.

CIP is currently developing the La Gan offshore wind farm with an estimated capacity of nearly 3.5 GW in the coastal province of Binh Thuan.

In November 2022, the company pledged substantial expenditures toward the long-term growth of green energy in the country, as stated during a meeting with its counterparts in Vietnam Electricity Group.

CIP was recently given a 500-MW capacity in the Feng Miao offshore wind power project’s third bidding round in Taiwan.

Hopes rise for blossoming foreign investment in Vietnam

The Foreign Investment Agency (FIA), under the Ministry of Planning and Investment, has said that overseas funding into Vietnam is expected to soar this year.

Do Van Su, deputy director general of the FIA, said, “We estimate that foreign direct investment (FDI) could reach $36-38 billion this year, while disbursed capital could reach $22-23 billion.”

Su suggested that China’s reopening will likely impact the inflow of FDI to Vietnam. “Some capital will flow into China instead of Vietnam and the other economies in the region. On the contrary, the process of shifting such capital of South Korea, Japan, and others from China will accelerate over the next few years,” said Su.

Many new projects have been approved for new or extra funding in Vietnam in recent times. Earlier this month, China’s Yadea Group signed an MoU with Tan Hung Industrial Zone to pump $100 million in a factory to manufacture and assemble electric motorcycles. The project will be implemented in the second quarter, with an expected capacity of about two million vehicles per year.

Last month, Compal Electronics, a leading Taiwanese electronics corporation, signed an agreement with Green i-Park in the northern province of Thai Binh. The manufacturer will lease more than 40 hectares of land there to build a manufacturing site.

A few months previously, Luxshare-ICT increased its investment capital by $150 million in Nghe An province, following a previous layout of $140 million for an electronic components plant. The new project is expected to officially come into operation in early 2024.

During a trip to Vietnam last year, Samsung CEO Roh Tae-Moon unveiled that the South Korean giant would make an additional investment of $3.3 billion in the country. Up to now, more than $2 billion has been realised. The remaining commitment is expected to be mobilised this year.

According to the Ministry of Planning and Investment, the total disbursed volume of FDI in 2022 was estimated to have reached a record $22.4 billion, up 13.5 per cent on-year. The total of newly registered capital, adjusted capital, capital contributions, and share purchase hit close to $27.72 billion, equivalent to 89 per cent of 2021’s figures.

Chinese automaker to build US$250-million factory in Vietnam

BYD Auto, an automotive firm based in the Chinese province of Guangdong, intends to construct a plant in Vietnam to produce parts for electric vehicles.

The business is in discussion with local partners on the project’s location.

The plan will kick off in the middle of 2023 with a total investment of US$250 million, the local media reported.

BYD Auto’s venture in Vietnam is part of the company’s aim to improve and diversify manufacturing activities. It earlier announced efforts to build facilities in Thailand by 2024, with an annual production of around 150,000 automobiles.

BYD Auto, a subsidiary of BYD Company, is a major automaker in China. The firm began as a battery manufacturer before entering the auto industry in 2003.

Given its rising sales in China, BYD Auto has sought to expand operations into potential markets, including Singapore, Japan and the European Union.

In December 2022, leading Chinese manufacturer Chery also revealed intentions to make its SUV Omoda 5 in Vietnam beginning in 2024.

Shippers earn big ahead of Tet
 
Many shippers are earning big thanks to the surge in deliveries in Hanoi before the Tet Lunar New Year.

Do Minh Tien in Hanoi who works as a Grab driver is now a shipper. He works from 8 am to 9 pm. In the morning, he has to deliver nearly 100 orders to Thanh Xuan and Dong Da districts.  

Many shippers are earning big thanks to the surge in deliveries in Hanoi before the Tet Lunar New Year

Nguyen Van Thanh, a shipper from Thanh Tri District, said that at this time each day, he made hundreds of calls. It can take two to three calls for many orders.

Orders at apartment buildings help shippers to save more than detached houses. For apartment buildings, he often sits in their reception and calls customers at the same time.

Tran Van Hoa, a student from the northern province of Hai Duong, is working as a shipper to earn money for Tet. According to him, the minimum fee for each drive is VND30,000 (USD1.20). His highest income these days is around VND1.5 million per day.

However, in many cases, it is quite time-consuming to find many delivery addresses. Shippers also have to ensure they take care of their orders, particularly when it involves breakables.

Vietnam’s e-commerce has been growing at a robust pace in the wake of Covid-19 pandemic, fueling a boom in transport and express delivery services.

It was estimated that Vietnam’s digital economy has been developing at an annual average rate of 38 percent since 2015, higher than the Southeast Asian average of 33 percent. 

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes